Liquor commissioners reject booze surcharge

The Oregon Liquor Control Commission on Wednesday narrowly rejected placing an additional 25-cent-a-bottle surcharge on the price of distilled spirits.

If the surcharge had passed, it would have raised a projected $16.2 million for the upcoming two-year state budget cycle. Though not a tremendous amount of money in a budget that will top $15 billion, it was revenue legislators had been counting on.

Rep. Peter Buckley, D-Ashland, the chief budget writer in the House, said lawmakers wanted to use the money to increase spending on law enforcement, the judiciary and health care. The money would have helped cover the societal costs of excessive alcohol consumption, he said.

The commissioners, all of whom were appointed to their posts by either Gov. John Kitzhaber or former Gov. Ted Kulongoski, have the legal authority to approve surcharges on liquor without the electoral fear of angering voters. But the commissioners who rejected the added fee said the Legislature is ideally the body that should handle taxation.

“The Legislature is currently in session and has the full authority, power and, I would argue, responsibility to deal with these revenue issues,” Rice said in a phone interview.

Commissioners recently extended a temporary 50-cent surcharge that has been in effect since April 2009. Rice, who owns the Virginia Cafe in downtown Portland, said he supported that fee four years ago because the state was in the middle of a financial crisis.

“Now, here we are four years later, and the 50 cents that was for a short-term emergency has become essentially institutionalized in government funding, and I don't think that's appropriate,” he said.

Adding another 25 cents would have been “egregious,” he said, particularly since it was only directed at distilled spirits, not other types of alcohol.

The Distilled Spirits Council of the United States praised Wednesday's vote, saying the “hidden tax” would have hurt consumers and the state's hospitality industry.

Commissioner Patridge, who is also the Klamath County district attorney, said the across-the-board, per bottle increase was inequitable.

“Should the $10 bottle of vodka and the $50 bottle of vodka pay the same tax?” he said. “It creates an unfair situation, frankly. It puts a higher burden on those who choose to buy more inexpensive alcohols.”